Novavax, Gavi reach settlement in messy COVID vax dispute

Feb. 22, 2024

Novavax and Gavi, the Vaccine Alliance, have reached a settlement related to a 2021 COVID vaccine deal, with the vaccine maker agreeing to pay Gavi a total of $400 million.

The disagreement goes back to a February 2021 advance purchase agreement through which Novavax was to provide 1.1 billion doses of its recombinant protein-based COVID vaccine candidate, NVX-CoV2373, to Gavi for the COVAX initiative. The initiative, which was led by the Coalition for Epidemic Preparedness Innovations, the World Health Organization and Gavi, aimed to deliver 2 billion coronavirus vaccine doses in 2021.

Per the deal, Novavax received an advance payment of $350 million from Gavi in 2021, and an additional $350 million in early 2022 after the vaccine got the WHO's emergency use listing. Within that span of time, however, several anonymous sources spoke to the media, claiming that Novavax was facing significant hurdles in proving it could manufacture its vaccine candidate to regulators’ quality standards — an issue that would delay production and result in a COVAX supply shortfall. The company denied the claims.

Then, in November 2022, Novavax terminated the Gavi agreement, claiming that Gavi had failed to purchase the contracted vaccines before the end of 2022. Novavax said that under the terms of the deal, the advance payments made by Gavi were not refundable.

But Gavi told a different story, claiming Novavax had breached the agreement. A Gavi spokesperson told Reuters that Novavax was to blame, and the issue was that the company failed to manufacture the doses it had promised Gavi.

Now, it seems the two have put their differences aside and settled the dispute. Under the terms of the settlement, Novavax will pay an initial $75 million to Gavi and has agreed to make deferred payments of $80 million annually through December 31, 2028, for a total up to $400 million.

Novavax’s annual cash obligation could be offset or reduced pursuant to an $80 million annual "vaccine credit," which would take effect if Gavi uses any of the company’s vaccines for supply to low-income and lower-middle income countries.